WSP ACCOUNTING -WALL STREET
PREP LATEST UPDATED 2025/2026
GRADED AT A+ QUESTIONS AND
VERIFIED ANSWERS 100%
1. Assume US GAAP to answer this question.
In 2017, $2 million in wages were earned and no cash wages were paid.
In 2018, $8 million in wages were earned and $7 million in cash wages
were paid.
- Cash wages were used to first pay wages earned in 2017 with the
remainder used to pay wages earned in 2018.
- Any earned but unpaid wages will be paid during the first quarter of
2019.
2. Using only the information provided, which of the following
statements is most accurate?
Liabilities increased by $1.0 million in 2018
Liabilities increased by $3.0 million in 2018
Assets decreased by $5.0 million in 2018
Retained earnings decreased by $10.0 million in 2018
Retained earnings decreased by $7.0 million in 2018 - ANSWER
Liabilities increased by $1.0 million in 2018
3. A company reported gross profit of $20 million in 2018. In addition,
it recorded the following activities:
Sales and marketing expenses were $5 million.
Interest income was $2 million.
Sold equipment for $5 million that had a net book value of $9 million.
,$3 million in preferred stock issuance.
Company's tax rate is 40%.
4. Calculate the company's net income.
$5.4 million
$6.0 million
$6.8 million
$7.2 million
$7.8 million - ANSWER $7,800,000
Gross Profit: 20,000,000
Sales and Marekting Exp: -5,000,000
= Operating Income: 15,000,000
Loss on Sale: -4,000,000
Interest Income: 2,000,000
= Adjusted Income: 13,000,000
Tax: -5,200,000 --> (13,000,000 x 40%)
Net Income: 7,800,000
5. The next two questions use the following data from TGX Global, a
heavy equipment manufacturer (this information will be repeated on the
next question):
TGX Global sells excavators, with an average sale price of $500,000 per
excavator.
TGX received new orders for 90 excavators in 2018.
TGX produced & delivered 120 excavators in 2018: 50 excavators were
ordered in 2017 and the rest (70 excavators) were ordered in 2018.
TGX received payment for 110 excavators.
TGX began selling 1-year maintenance services contracts for $50,000
per excavator in 2018, which begin after the excavator is delivered.
Contracts were sold on 50% of all excavator orders made in 2018 (no
contracts were sold on orders placed in 2017).
, 6. Assume all excavators delivered in 2018 are delivered at year end,
calculate TGX's 2018 revenue based on the transactions described
above. - ANSWER Total Revenue: 66,000,000
Excavators delivered in 2018: 120
Price per unit: 500,000
Total Rev 2018: = 60,000,000
Maintenance service rev: 50,000 at 120 units = 6,000,000
Final total: 66,000,000
7. Assume now that instead of the revenue recognized in the previous
question, TGX recognized $50 million in revenue for 100 excavators
(and assume no maintenance contract revenue was recognized). In
addition, the following occurred in 2018:
TGX recognized $2 million in shipping and delivery costs for the
materials it uses to produce excavators.
TGX recognized $6 million in direct labor expenses.
TGX recognized $3 million in commissions paid to its salespeople for
selling the excavators.
TGX purchased $60 million in raw materials in 2018, of which $50
million was in cash.
Raw materials required to assemble each excavator cost $300,000 per
excavator.
8. Calculate TGX's 2018 gross profit based on the transactions described
above.
$(15.0 million)
$9.0 million
$12.0 million
$14.0 million
$18.0 million - ANSWER Gross Profit: 12,000,000
PREP LATEST UPDATED 2025/2026
GRADED AT A+ QUESTIONS AND
VERIFIED ANSWERS 100%
1. Assume US GAAP to answer this question.
In 2017, $2 million in wages were earned and no cash wages were paid.
In 2018, $8 million in wages were earned and $7 million in cash wages
were paid.
- Cash wages were used to first pay wages earned in 2017 with the
remainder used to pay wages earned in 2018.
- Any earned but unpaid wages will be paid during the first quarter of
2019.
2. Using only the information provided, which of the following
statements is most accurate?
Liabilities increased by $1.0 million in 2018
Liabilities increased by $3.0 million in 2018
Assets decreased by $5.0 million in 2018
Retained earnings decreased by $10.0 million in 2018
Retained earnings decreased by $7.0 million in 2018 - ANSWER
Liabilities increased by $1.0 million in 2018
3. A company reported gross profit of $20 million in 2018. In addition,
it recorded the following activities:
Sales and marketing expenses were $5 million.
Interest income was $2 million.
Sold equipment for $5 million that had a net book value of $9 million.
,$3 million in preferred stock issuance.
Company's tax rate is 40%.
4. Calculate the company's net income.
$5.4 million
$6.0 million
$6.8 million
$7.2 million
$7.8 million - ANSWER $7,800,000
Gross Profit: 20,000,000
Sales and Marekting Exp: -5,000,000
= Operating Income: 15,000,000
Loss on Sale: -4,000,000
Interest Income: 2,000,000
= Adjusted Income: 13,000,000
Tax: -5,200,000 --> (13,000,000 x 40%)
Net Income: 7,800,000
5. The next two questions use the following data from TGX Global, a
heavy equipment manufacturer (this information will be repeated on the
next question):
TGX Global sells excavators, with an average sale price of $500,000 per
excavator.
TGX received new orders for 90 excavators in 2018.
TGX produced & delivered 120 excavators in 2018: 50 excavators were
ordered in 2017 and the rest (70 excavators) were ordered in 2018.
TGX received payment for 110 excavators.
TGX began selling 1-year maintenance services contracts for $50,000
per excavator in 2018, which begin after the excavator is delivered.
Contracts were sold on 50% of all excavator orders made in 2018 (no
contracts were sold on orders placed in 2017).
, 6. Assume all excavators delivered in 2018 are delivered at year end,
calculate TGX's 2018 revenue based on the transactions described
above. - ANSWER Total Revenue: 66,000,000
Excavators delivered in 2018: 120
Price per unit: 500,000
Total Rev 2018: = 60,000,000
Maintenance service rev: 50,000 at 120 units = 6,000,000
Final total: 66,000,000
7. Assume now that instead of the revenue recognized in the previous
question, TGX recognized $50 million in revenue for 100 excavators
(and assume no maintenance contract revenue was recognized). In
addition, the following occurred in 2018:
TGX recognized $2 million in shipping and delivery costs for the
materials it uses to produce excavators.
TGX recognized $6 million in direct labor expenses.
TGX recognized $3 million in commissions paid to its salespeople for
selling the excavators.
TGX purchased $60 million in raw materials in 2018, of which $50
million was in cash.
Raw materials required to assemble each excavator cost $300,000 per
excavator.
8. Calculate TGX's 2018 gross profit based on the transactions described
above.
$(15.0 million)
$9.0 million
$12.0 million
$14.0 million
$18.0 million - ANSWER Gross Profit: 12,000,000
